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FEDERAL RESERVE BANK New of York F i s c a l A g e n t o f t h e U n it e d S t a t e s f C i r c u l a r no. L UNNECESSARY To a l l I s s u i n g in f r o m MR. E. en listin g standing F. reverse BARTELT. your f o r United S ta tes t he S e c o n d F e d e r a l R e s e r v e D i s t r i c t : On t h e side of F iscal assistance in elim in atin g Series E savin gs cooperation can bonds may that be cashing both A dditional No. w ill is a copy secretary of unnecessary of the a letter Treasury, cashing o f out bonds. recogn ize new circu lar A ssistant Your to th is 653, revised be fu rn ish ed help ou tstan din g unnecessary cop ies A pril upon 29. owners of a nd th is 1952. of bonds ill in order E savings bonds to to sw itch the advised. circu lar referred S eries to a nd in of Mr. request. ALLAN SPROUL. President. Treasury B artelt’ s 3852 j 1952 CASHING OF SERIES E SAVINGS BONDS and P a y i n g A g e n t s S a v i n g s Bonds May 12 , C ircular letter, J T R E A S U R Y DEPARTMENT WASHINGTON May 5, 1952 TO PAYING AM ISSUING AGENTS FOR UNITED STATES SAVINGS BONDS: D The in c r e a s e in the in t e r e s t r a te s on S e r ie s E Savings Bonds is s u e d on and a f t e r May 1 , w hich was announced on A p r il 2 9 , may r a is e a q u e s tio n in th e minds o f some bond owners whether th ey should cash any o f t h e i r bonds issu e d p r i o r t o May 1 in ord er t o r e in v e s t the proceed s in one o f the new S e r ie s E bonds* I t i s b e lie v e d th a t paying and is s u in g agents f o r U nited S ta tes Savings Bonds are in a p o s i t i o n t o render a v a lu a b le s e r v ic e t o t h e ir custom ers in o r d e r t o a v o id i l l - a d v i s e d cash in g o f S e r ie s E bonds w hich were is s u e d p r io r t o May 1 , and p a r t i c u l a r l y th ose which are more than 4 months old * S p e c ia l a t t e n t io n i s c a l l e d t o the f a c t th a t ou tstan d in g S e r ie s E bonds which were purchased p r i o r t o January 3 , 1952, by t h e i r o r ig in a l terms and c o n d it io n s , w i l l earn more than Z% i n t e r e s t compounded sem iannually f o r the p e r io d from May 1 , 1952 t o m aturity* As you know, the annual y i e l d t o m atu rity in c r e a s e s w ith the age o f the bonds* S e r ie s E bon d s, which have been ou tsta n d in g f o r 5 y e a r s , f o r exam ple, earn i n t e r e s t on t h e i r cu rren t redem ption valu e f o r the rem aining 5 yea rs o f t h e i r l i f e a t an annual r a te o f ap p roxim ately per annum* The T reasu ry, o f c o u r s e , i s anxious th a t paying and is s u in g agents f o r United S ta tes Savings Bonds co o p e ra te as f u l l y as p o s s ib le where the owner o f a savings bond issu e d p r i o r t o May 1 w ishes t o r e in v e s t in the new S e r ie s E bond; on the o th e r hand i t w ould be h e lp f u l from the sta n d p oin t o f both the bond owner as w e ll as the Government i f paying and is s u in g agents f o r United S ta tes Savings Bonds would make a s p e c ia l e f f o r t t o a cq u a in t bond ow ners, when i t seems a p p r o p r ia te , o f the in vestm en t v a lu e s o f t h e i r S e r ie s E bonds w hich have been ou tsta n d in g f o r s e v e r a l months* In o r d e r t o a v o id m isunderstanding i t does n o t appear bo be p r a c t ic a b le t o make a g en era l announcement con cern in g t h is m atter* I t i s b e lie v e d th a t b e t t e r r e s u lt s co u ld be ob ta in ed i f the s it u a t io n should be handled on a p e r s o n a l b a s is * This i s because o f the va ry in g p e rso n a l f a c t o r s which are in v o lv e d i n the purchase o r redem ption o f savings bonds* Because o f your c l o s e c o n t a c t s w ith owners o f S e r ie s E savings bonds you are in a p o s it io n t o ren d er v a lu a b le s e r v ic e s t o your custom ers in a d ir e c t and p erson a l manner by b r in g in g t o the a t t e n t io n o f any h o ld e rs who are contem platin g sw itch in g in t o new E bonds the investm ent retu rn on the cu rre n t redem ption valu e o f t h e ir p r e s e n t S e r ie s E savin gs bonds* These v a lu e s are shown in Table B a tta ch e d t o T reasu ry C ir c u la r No® 653, r e v is e d A p r il 2 9 , 19b2, p r e v io u s ly fu r n ish e d t o you* F is c a l A s s is ta n t S e c r e ta r y